Taiwan earmarks $130m for submarines

Taiwan has allocated NT$3 billion (S$130.2 million) over four years, beginning next year, to launch a long-awaited programme for the island to build its own diesel-electric submarines.

It is the first in a plan that has been talked about since the early 2000s, when a deal with the US for eight diesel-electric submarines fell through because of technical and political constraints.

The spending was set out in the defence ministry's budget for 2016. The plan comes as other navies in the region expand their submarine fleets, in part to create a strategic deterrent against China's growing naval assertiveness in Asian waters.Taiwan has four ageing submarines, including two that date from World War II, while China has about 70 submarines, along with dozens of surface ships and a refurbished aircraft carrier.

China sees self-ruled Taiwan as a renegade province, and has never renounced the use of force to take back the island.

Critical to Taiwan's indigenous submarine programme is the transfer from the US, or other Western countries, of submarine-manufacturing technology. Support from US companies, or release of export technology controls, would need a nod from the US government.

China opposes any form of military technological transfers or weapons sales to Taiwan.

The spending plan, which is allotted through to 2019, covers only the contract design phase of what should be a decades-long programme.

Taiwan's Ship and Ocean Industries R&D Centre, a government-backed ship designer and technical consultant, is expected to select a consortium to lead the contract design phase, according to military and industry sources in Taiwan.

Taiwan lacks submarine design skills, the ministry stated in its budget plan. By carrying out this first phase, Taiwan will be able to deepen its vessel design capabilities, develop its industry and acquire intellectual property, it said.

The defence ministry is planning to spend NT$321.7 billion next year, accounting for 16.1 per cent - the biggest share - of the central government's overall expenditures, budget plans show.